Missouri Rural Economic Stimulus Act
The Supplemental Rural Development Financing Program provides that municipalities with qualifying development projects may deposit "other net new revenues" in the State Supplemental Rural Development Fund to cover eligible project costs.
Eligible Project Costs include, but are not limited to the following:
- Costs of studies, appraisals, surveys, plans and specifications;
- Professional service costs, such as architectural, engineering, legal, marketing, financial or planning services;
- Land acquisition, demolition costs and site preparation;
- Costs of rehabilitating and repairing existing public buildings;
- Costs of constructing public works or improvements;
- Financing costs, such as costs of issuance, capitalized interest, underwriting expenses and reserve funds;
- A taxing district’s capital costs resulting from the development project, to the extent the municipality by written agreement accepts and approves such costs; and
- State government costs related to evaluation and administration of the Development Project.
How Does the Program Work?
Municipalities wishing to utilize the program must:
- Must adopt a Development Plan in reliance on findings that a reasonable person would believe:
- The Development Area on the whole is a Blighted Area.
- The Development Area has not been subject to growth and development through investment by private enterprise and would not reasonably be anticipated to be developed without the implementation of one or more Development Projects and the adoption of local and state development financing.
- The Development Plan conforms to the comprehensive plan for the development of the Municipality as a whole.
- The estimated dates, which shall not be more than twenty-five years from the adoption of the ordinance approving any Development Project, of the completion of such Development Project and retirement of obligations incurred to finance Development Project Costs.
- A business and residence relocation assistance plan has been developed, if applicable.
- A cost-benefit analysis showing the economic impact of the Development Plan on the municipality and school districts that are at least partially within the boundaries of the Development Area.
- An economic feasibility analysis including a pro forma financial statement indicating the return on investment that may be expected without public assistance. The financial statement shall detail any assumptions made, a pro forma statement analysis demonstrating the amount of assistance required to bring the return into a range deemed attractive to private investors, which amount shall not exceed the estimated reimbursable project costs.
- A state cost:benefit analysis must be submitted. The methodologies and underlying assumptions used in making the analysis must be included. Department of Economic Development (DED) and Missouri Agricultural and Small Business Development Authority (MASBDA) must be allowed access to/communication with any entity or person that prepared the analysis.
Who is Eligible?
To qualify for the Program, a Development Project must be located in a Development Area. Within an eligible Municipality, a Development Area must meet all of the following criteria:
- It must be a Blighted Area;
- It includes only those parcels of real property directly and substantially benefited by the proposed Development Plan;
- It can be renovated through one or more Development Projects;
- It is contiguous (with limited exceptions for up to three noncontiguous areas); and
- It shall not exceed ten percent (10%) of the entire area of the Municipality.
Amount and Terms
No more than fifteen (15) years of State Supplemental Rural Development Financing can be provided unless specific approval from DED and MASBDA for a longer term, which cannot exceed twenty-five (25) years.
DED will request appropriation authority from the State Supplemental Rural Development Fund adequate to cover all approved Development Projects. The law limits that annual amount available for MORESA to $12,000,000.
Financing under the program is only available if the Development Plan provides that 100% of "Payments in Lieu of Taxes" (PILOTS) and 50% of "Economic Activity Taxes" (EATS) generated by the Development Project are used each year for Development Project Costs.
The applicant must demonstrate that the proposed Development Project could not be financed without the use of state funds. The applicant’s request for state increment must be the minimum necessary to cause the Development Project to be developed.
No Development Project Costs will be reimbursed by the Program and no funds may be counted as the local match if such costs have been committed or incurred prior to MASBDA’s approval of an Application and the issuance by DED of a Certificate of Approval.
State supplemental rural development financing shall not be used for retiring or refinancing debt or obligations on a previously publicly financed redevelopment project without express approval from DED and MASBDA. No approval can be granted unless the Application contains Development Projects that are new projects which were not a part of the development projects for which there is existing public debt or obligations.
MASBDA charges an Application and processing fee of 25 basis points (¼ of 1% or .0025) with a cap of $25,000. The entire fee is due with the Application. Any unused portion of the fee will be refunded.
The authority also administers the Missouri Value-Added Grant Program, Missouri Value-Added Loan Guarantee Program, and the New Generation Cooperative Incentive Tax Credit Program.